WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/KOR/47 
24 April 2012 
 (12-2171) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Replies to Questions Posed by AUSTRALIA1 Regarding the  
New and Full Notification of KOREA2 
  
 The following communication, dated 20 April 2012, is being circulated at the request of the Delegation of Korea.   
 
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Support for Farm Machinery Manufacturing 
 
 This programme aims to assist off-season ma nufacturing of farm machinery and to help 
machinery manufacturers meet the high dema nd for farm machinery during the farming 
seasons.  It is also designed to promote manufacturing and supply of high quality agricultural 
machinery made in Korea by providing financia l resources to production facility establishments 
of machinery required for automization and modernization of agricultural facilities and 
machinery.  
Question 1 
 
 Can Korea please provide details of the elig ibility criteria and guidelines for access to 
this programme? 
 
Reply 
 
 This program aims to provide assistance to the farm machinery manufacturers when they 
purchase raw materials or construct production fac ilities.  Eligibility for Raw Materials Support is 
determined by various criteria including average sales of the most recent two years, sales figures of 
eco-friendly farm machinery and R&D investment.  Eligibility for Production Facility Support is 
determined by financial, technical and administrative capacity of the manufacturers.  
                                                      
1 G/SCM/Q2/KOR/43. 
2 G/SCM/N/220/KOR. G/SCM/Q2/KOR/47 
Page 2 
 
 
  FISHERIES 
 
A. Support for Development of Deep-Sea Fishery 
 
Question 2 
 
 Grants are provided to a "cooperative fund" to compensate for th e lower interest rates 
provided.  What is the nature of the cooperative  fund?  Is this a government agency or industry 
cooperative? 
 
Reply 
 
 The cooperative fund is operated and administer ed by the National Federation of Fisheries 
Cooperatives, an industry cooperatives funded and operated by member fishermen. 
 B. Support for Fish Products Processing Development 
 Question 3 
 
 Are the grants and loans for capital purposes?   Are these grants/loans discretionary and 
what are the eligibility criteria? 
 
Reply 
 
 The grants under this program are for pur chasing, constructing or installing capital goods, 
while the loans are for supporting operating costs.  It is not discretionary to select among eligible 
applicants for the assistance and such selection is  strictly enforced according to the statutory 
eligibility requirements.  The eligibility criteria in clude the followings:  obtaining fishing license, 
presenting business feasibility, securing construction s ite for the fishery product processing facilities, 
providing sufficient collaterals to pay principal and interest in accordance with the terms and 
conditions of the programs.   C. Support for Fishing Activities 
 
Question 4 
 
 Are the loans discretionary and what are the eligibility criteria? 
 Reply 
 
The financing under this program is not provide d based on discretion.  An applicant must 
demonstrate the satisfaction of all statutory eligib ility requirements, such as the possession of a valid 
aquaculture license or a fishing permit, or the proof th at he or she has engaged in the reported fishery.  
In addition, an ordinary credit evaluation is also performed by the fisheries cooperatives which 
operate and administer the loans.  
 
D. Support for Aquaculture Fishery Development 
 Question 5 
 
 Are the loans discretionary?  The notifica tion notes that the terms of a grant for 
expenses depends on the business type.  Coul d Korea please elaborate on the criteria.  G/SCM/Q2/KOR/47 
 Page 3 
 
 
  Reply 
 
The loans under this program are not provide d based on discretion.  The commonly-shared 
criteria include persons or entities to hold a valid li cense or permit under the Fisheries Act, to provide 
business feasibility, to get credit evaluation.  As fo r an example of the individual sub-programs, there 
are a grant program for purchasing eco-friendly mixed feed and a loan program for improving run-
down aquaculture facilities.  
 
F. Support for Vessel Decommissioning 
 Question 6 
 
How is the amount of grant determined, th at is, how is the value of the vessel 
determined? 
 Reply 
 
 
The amount of assistance under this program consis ts of two parts: the compensation for the 
loss of fishing opportunities and the compensation for the current price of the vessel and fishing gears.  
The amount of compensation for the loss of fishi ng opportunities is equal to the accumulated amount 
of average incomes of the relevant vessels for the past three years.  For the price compensation, the 
current price of the vessel and fishing gears are de termined by an appraiser duly designated by the 
Minister for Food, Agriculture, Forestry and Fisher ies or the heads of respective local governments.  
 
 
 
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